Atlanta has long benefited from having home prices that were lower than many big cities. But that advantage has been slowly ebbing the past few years. Atlanta home prices have been rising faster than average incomes.
Most transfers to Atlanta are coming from more expensive cities, but not all, said Chris Burns, Atlanta-based senior vice president of Lincoln Property Company, a national firm that manages 40 properties around Atlanta.
“You are definitely paying a premium if you are moving from Chattanooga to Atlanta,” Burns said, “but not as much as the premium you pay moving to Boston or New York.”
Another step away from affordability came Tuesday with release of the S&P CoreLogic Case-Shiller Index, which showed the average cost of a home in metro Atlanta up 5.7 percent over 2017.
That’s twice as much as the increase in median pay.
If that trend continues, it could spell trouble, Carnathan said. "If we don't so something about affordability of housing, that will become a problem for Atlanta's growth."
Many of the new arrivals to the city are young professionals, early in their careers and looking for a "starter" home. Unfortunately for them, the Atlanta price increases are worst at the lower end of the market, said Christa Huffstickler, chief executive of Engel & Völkers.
There are not just enough homes listed for sale at prices that a first-time buyer might be able to afford – which means potential buyers bid against each other, she said. “We are seeing many months’ supply in the higher price points. There’s a shortage in the lower price points.”
The competition for houses drives up prices, she said.
And those who don’t buy and decide to rent contribute to rents rising, as well.
Atlanta’s average rents are up 4.5 percent from a year ago, according to RealPage, a research and data company that tracks real estate. That is the sixth-fastest jump among major markets, according to the Texas-based firm.
Median pay in Atlanta is up only 2.6 percent over last year, according to Glassdoor, which tracks jobs and incomes.
Top moving destinations, 2018
1. Washington, D.C.
4. New York City
5. Los Angeles
10. San Francisco
Home price increases in past year*
Las Vegas: 13.5 percent
San Francisco: 9.9 percent
Seattle: 8.4 percent
Denver: 7.4 percent
Phoenix: 7.2 percent
Tampa: 6.7 percent
Detroit: 6.3 percent
Minneapolis: 6.0 percent
Atlanta: 5.7 percent
Average, top 20 metros: 5.1 percent
Source: S&P Corelogic Case-Shiller Index
*Not counting new homes
Source of most moves to Atlanta, 2018
10. College Park